Our Esteemed Shareholders,
I am delighted to assert that, similar to past years,
our Company delivered achievements in all operating
geographies in 2006, meeting our already high targets.
Positive impact of successful policies conducted in
concert with the International Monetary Fund and
progress on the European Union accession front,
despite small drawbacks, played an important role
in our country’s economy to post a consecutive
growth for the fifth year since 2001. Accordingly,
together with 6.0% growth achieved in 2006, Turkey
materialized a total growth of around 42% over the
course of past five years on a cumulative basis.
Throughout 2006 crude oil prices had an increasing
trend due to the political tension in the Middle East
and reached a record high of USD 77 per barrel in
August. This impacted some of our operating markets
like Russia, Kazakhstan and Azerbaijan positively
whereas Turkey, as an oil importer, was affected
adversely. Outside of Turkey, as the US and the
European Central Banks increased the short term
interest rates due to inflationary pressures, some of
the capital flows from the developed markets to
developing markets retreated in 2006. Meanwhile
May-June period was quite turbulent in the Turkish
financial markets as a result of internal political agenda
including the uncertainties in the process of the
Central Bank Governor appointment and discussions
over the Presidential elections.
Privatizations and, in particular, an increased interest
of the foreign investors to the finance sector were
also among the important factors that was at work
last year. In 2006, net foreign direct investment
inflows reached USD 20.2 billion, a record high level
for Turkey. Start of the privatization of the electric
distribution territories together with the expectation
that the economic growth will be maintained suggest
that our country will continue to be a center of
attraction for direct investments in the coming periods.
Dear Shareholders,
Our journey that has started 37 years ago
with two breweries in Turkey today continues as a beverage system
operating in ten countries with 15 breweries having
33 million hectoliters of capacity and 12 bottling
facilities with 573 million unit cases of bottling
capacity. In 2006, our Company was again the largest
brewer in Turkey with a market share up to 82% and
the largest producer and distributor of non-alcoholic
beverages with 65% market share in the carbonated
soft drinks segment. Capitalizing on the abilities and
experience provided by this position, we also achieve
significant success outside of Turkey which we are
proud of, setting our mission to create maximum
sustainable value for all our stakeholders.
Within this context, we fortified our fourth position
in Russia, third largest beer market in the world, with
the acquisition of the Krasny Vostok Brewing Group
which was completed in February 2006. We also
feel proud of the fact that the sales volume of our
international beer business exceeded the 10 million
hectoliter mark together with this acquisition.
Consequently in 2006 our Company has stepped up
to become the sixth largest Europe based brewing
group and 16th largest worldwide. Furthermore,
following the restructuring of our soft drinks
operations, our business has also become the 10th
largest bottling business globally. Our consolidated
Net Sales Revenue was YTL 2.6 billion, up 60% over
2005 and consolidated Cash Operating Profit was
YTL 593 million.